Small profit was important milestone for Yorkshire CCC, says chairman Steve Denison
YORKSHIRE say they are in a stronger financial position than they have been for some time after recording their first profit since 2009.
The club have announced a profit after tax of £368,000 for 2015, an achievement hailed by chairman Steve Denison as an “important milestone”.
However, Yorkshire remain around £22m in debt and face what Denison describes as “substantial headwinds”.
Not only do the club need to eliminate the debt, which Denison maintains is “a key priority over the next 10-15 years”, but they also need to raise around £15m to build the new Football Stand by 2019 to help guarantee Headingley’s international future.
Yorkshire’s staging agreement with the England and Wales Cricket Board expires in 2019, after which the club are no longer guaranteed international games.
Yorkshire need to improve Headingley in terms of capacity and facilities to meet international standards and are working to raise at least £8m of the cost towards the new stand through grants.
The timescale is tight, and in addition to a lucrative Ashes Test scheduled for 2019, Yorkshire have four World Cup games contingent on the new stand being completed.
It means the club are likely to have to take on further debt in the short term, with the long-term benefit of the safeguarding of international cricket through the construction of a new stand that would, in turn, help generate income through commercial activities.
“The debt will probably have to go up even further to guarantee international cricket because the problem is that we’ve got to build the new stand, which means that we need more money,” said Denison.
“If you look at why the debt has grown over the past dozen years, it’s because we’ve invested in the ground, and the reason we’ve had to do that is to maintain international status.
“The difference this time, however, with this stand is that it will give us an asset that will generate serious revenue and profit.
“After 2019, we would expect the financial picture to improve considerably.”
Yorkshire recently refinanced their debt to reduce annual interest by almost £300,000, with no scheduled capital repayments until 2019.
They remain severely hamstrung, however, with Denison the first to admit that “without the repeated injection of loans by (former chairman) Colin Graves, YCCC would have been bust years ago”.
Part of the refinancing means that previous loans from Graves have been repaid, with £18.9m now advanced by the Graves family trusts rather than by him personally, a restructuring that has enabled the club to be financially independent from Graves in his capacity as England and Wales Cricket Board chairman.
As part of the refinancing, Leeds City Council accepted £6.5m in settlement of the £7.4m capital outstanding on another loan.
The financial ins-and-outs are inevitably complex, but Yorkshire say they are pleased with their day-to-day business model.
“When you look at international sales and domestic sales, every sub-division of that is up,” added Denison. “The trend is up, and we’re doing a better job of providing the various products.
“We’ve already had just under 500 new members in 2016, and although membership is not what it was in years past, it is in decline pretty much everywhere in county cricket, but not here.
“Achieving a small profit in 2015 was an important milestone, and the positive trends in revenues across all categories have continued into the new year.
“On top of that, we have various plans to drive revenues and profit forward over the next few years.”
Yorkshire’s financial figures for 2015 show overall income to be up by 14 per cent on the previous year and by 23 per cent on 2013. Cash from international and domestic cricket increased, as did money from subscriptions. Overall costs increased in line with sales to £7.8m from £6.8m in 2014.
Yorkshire’s players’ wage bill rose by £358,000, which the club attributed to maintaining a larger squad necessary to cover players called up to represent England.
Yorkshire continue to provide more players for international cricket than any other county, with success on the field not simply confined to the first team but stretching down through the various age groups.
Paul Hudson, Yorkshire’s director of finance, echoed Denison’s comments concerning the financial health of the club.
“We have made further progress in 2015, and to report an annual profit for the first time since 2009 is a significant step forward,” he said.
“It is gratifying that turnover in all areas has increased consistently over the past three years and we expect this trend to continue in 2016.
“The successful completion of the club’s refinancing was a watershed, and we are confident that the existing debt is now at a manageable level.
“The club is in a stronger financial position than it has been at any time in recent years.”